Rieder: A big victory for journalism in Philly

May 27, 2014
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Businessman Lewis Katz, left, and philanthropist H.G. "Gerry" Lenfest at a news conference after a closed-door auction to buy the The Philadelphia Inquirer and Philadelphia Daily News. Katz and Lenfest are taking over Philadelphia's two largest newspapers with an $88 million auction bid. / Matt Rourke, AP

by Rem Rieder, USA TODAY

by Rem Rieder, USA TODAY

The auction ending the ugly ownership melodrama that has engulfed The Philadelphia Inquirer, the Philadelphia Daily News and Philly.com over the past couple of years resulted Tuesday with the right faction prevailing.

The news outlets have been hamstrung by a bitter dispute between two groups of owners representing very different approaches to journalism.

One, headed by former New Jersey Nets owner Lewis Katz, supported a newsroom regime committed to ambitious enterprise reporting about the city's vexing and manifold social problems.

The other, led by insurance executive and South Jersey Democratic power George Norcross, wanted to move in the direction of small ball with an emphasis on hyperlocal news. It has controlled Philly.com, the pre-eminent digital property of the news conglomerate, which is dominated by calorie-free sensationalism and linkbait.

On Tuesday, Katz and his ally among the owners, philanthropist H.F."Gerry" Lenfest, prevailed. While the auction overseen by Delaware Chancery Judge Donald Parsons was expected to be an epic brawl - Norcross and Katz are highly successful players who don't much enjoy losing - it instead turned out to be a one-punch knockout. The bidding started at $77 million. Katz and Lenfest bid $88 million. Norcross and Co. responded, "No mas." Game over.

It marked the fifth - yes, fifth - time in eight years that the embattled papers' ownership has changed hands. Katz and Norcross were among a group of business leaders who bought the news outlets from venture capitalists for $55 million in 2012.

Why does any of this matter to anyone besides the dueling owners, the journalists in the newsrooms and media junkies? Because journalism is a critical element in our democracy. And Philadelphia - in many respects, a world-class city but one dogged by daunting challenges in dealing with poverty, education and crime - desperately needs serious watchdog journalism.

The symbol of what's at stake in this unusually bloody management battle is Bill Marimow, the Inquirer's editor. The simmering ownership dispute came to a boil last October when Publisher Bob Hall, a Norcross loyalist, fired Marimow. Katz promptly went to court, and when the dust settled, Marimow had been reinstated. (Disclosure: Marimow is a friend and a fellow Philly guy.)

Clearly, the situation was untenable, and the Delaware court was asked to dissolve the agreement that had formed owning company Interstate General Media and clean up the mess. Thus, Tuesday's auction.

The ownership imbroglio was complicated by the fact that Interstate General Media was run by a management committee that consisted of two people, Katz and Norcross. Both had to sign off on major decisions, which was a challenge, given that they don't agree on much of anything. Marimow's position was strengthened powerfully by the fact that Katz's longtime companion, Nancy Phillips, happens to be the Inquirer city editor - and a Marimow protege.

Marimow won two Pulitzer prizes as a reporter and is widely respected for his devotion to and skill at fostering ambitious investigative reporting. But he has his detractors. He's been fired from a number of top newsroom positions, and was once demoted as the Inquirer's editor for being insufficiently digital.

That's no small thing. Print journalism has been profoundly battered by the Internet, and newspaper companies are frantically struggling to plot and implement a digital future.

Marimow alluded to the challenges that lie ahead when I asked for his post-auction thoughts. His tenure would have lasted about two seconds in the event the auction had gone the other way.

"There is," he said, "a lot of hard work to be done in the days ahead to ensure that excellent journalism - in The Inquirer, the Daily News and Philly.com - continues and that it leads to a viable, profitable business. I've always believed that great journalism - in print and in the multimedia world - will lead to profits, and that when a news organization is profitable, some of those profits can be plowed back into the newsrooms."

Profits? The Philly papers haven't seen any of them for quite awhile. Here's hoping Marimow is right. Because, no matter how deep the pockets of the owners, without a serious financial turnaround, all the high-minded aspirations will be for naught.